Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BlackSky Technology Inc (BKSY, Financial) reported a strong year-over-year revenue growth of 29% in Q2 2024, driven by increased demand for its space-based intelligence solutions.
- The company achieved $40 million in new awards and extensions, highlighting strong customer demand from US and international government agencies.
- BlackSky Technology Inc (BKSY) delivered its third consecutive quarter of positive adjusted EBITDA, showcasing strong operating leverage and revenue growth.
- The production of next-generation Gen-3 satellites is on track, with the first 35-centimeter resolution satellite planned for launch in late Q4 2024.
- International revenues more than doubled compared to the prior year, now representing 40% of BlackSky Technology Inc (BKSY)'s business, indicating successful expansion in international markets.
Negative Points
- Imagery and analytics revenue saw a sequential decline, raising concerns about variability in revenue streams.
- The company faces potential revenue variability due to milestone-based contracts, which can lead to quarter-over-quarter fluctuations.
- Despite strong performance, BlackSky Technology Inc (BKSY) is still in the early stages of the Global Data Marketplace (GDMP), which may take time to mature as a significant sales channel.
- The company is heavily reliant on the successful deployment and operation of its Gen-3 satellites, which are crucial for unlocking future revenue growth.
- There is uncertainty regarding the timing of certain government contract awards, such as the NGA to Luno A, which could impact future revenue projections.
Q & A Highlights
Q: Can you provide more color on the imagery and software growth this quarter, and why it declined sequentially?
A: Brian O'Toole, CEO: Historically, we've seen a step-up in imagery and analytics revenues in the second half of the year due to budget cycles and renewals. The growth is driven by adding more customers who start with smaller projects and expand over time. This pattern contributes to our high-margin business and EBITDA performance.
Q: Is the GDMP vehicle incremental to your existing contracts, and how does it work?
A: Brian O'Toole, CEO: Yes, GDMP is separate and incremental. It provides a new sales channel for a broad set of services, including analytics. It's a fast and flexible platform for delivering capabilities to new customers, and we're excited about its potential.
Q: What is the launch cadence for the Gen-3 satellites, and how long until they generate revenue?
A: Brian O'Toole, CEO: The first few Gen-3 satellites will launch separately, with a typical commissioning time of about 60 days. After that, we'll move into a steady cadence of launches. Historically, we've reduced commissioning time to under 24 hours for Gen-2 satellites, and we anticipate similar performance for Gen-3.
Q: How much of the backlog is tied to Gen-3 capabilities, and when do you expect the NGA to Luno A contract to be awarded?
A: Brian O'Toole, CEO: A significant portion of the backlog is tied to Gen-3, including the EOCL contract. We are well-positioned for the NGA to Luno A contract, but we don't have a specific timeline from the government. We expect it later this year.
Q: Can you explain the current environment for acquiring and retaining AI talent?
A: Brian O'Toole, CEO: We've been successful in recruiting and retaining AI talent due to the exciting and meaningful work we do in space-based intelligence. Our mission to support a safer and more secure world is attractive, and we haven't faced significant challenges in this area.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
